I recently had the honor to meet with Eric von Hippel. Eric is the Head of the Innovation and Entrepreneurship Group at the MIT Sloan School of Management and the author of "The Sources of Innovation" and "Democratizing Innovation."
I wanted to be sure that I clearly understood Eric's concept of "lead users" and to discuss with him my contention that lead users are often your "lead customers." He disagrees with my contention. Lead users may not be your customers, Eric explains, because they’re the people who couldn’t find the product or solution they needed from your firm (or any others), so they designed their own solutions.
Of course, Eric identified "lead user innovation" and has studied it deeply for more than two decades. As I understand Eric's distinction, lead users would have been your customers if you had a solution that worked for them. But you may not. So they’ve gone elsewhere and designed their own successful solutions. Lead users may be your early adopter customers—the ones who really push the envelope. But they also include people who probably aren't currently on your radar. "Lead users are a much broader category than customers of a specific firm," Eric explains in "Democratizing Innovation." "Lead users that generate innovations of interest to manufacturers can reside…at the leading edges of target markets, and also in advanced analog markets". Analog markets are fields that may be adjacent to yours, but which you don't currently serve (and may not intend to serve), but which you can learn from.
I believe one of the main points Eric is making is that you will have a much higher success rate in innovating new products or processes if you discover products or processes that lead users have already invented (as opposed to trying to invent de novo in your labs). Then you can commercialize those user-led innovations and know that you're meeting a real customer need (assuming that this lead customer represents more than a market of one).